HILDESHEIM, Germany, Dec 21 (Reuters) - Banks should not become addicted to central bank money, European Central Bank Executive Board member Juergen Stark said on Monday.
He also said the ECB would remove its non-traditional measures gradually and progressively, and warned that the longer the extraordinary support remains in place, the worse their side effects would become.
"We have already had the last 12-month refinancing operation," Stark said in a speech at a University of Hildesheim and Volksbanken event in Northern Germany. "We will withdraw measures gradually and progressively."
Banks could become too dependent on central bank financing and the longer the central bank helps banks, the smaller their incentive to clean up balance sheets is, Stark said.
Extra liquidity may also lead to new risk-taking, Stark said, and added not all financial market participants had learned their lessons.
He also said the level of potential growth has decreased due to the economic crisis.
(Reporting by Arno Schuetze, writing by Sakari Suoninen; Editing by Ron Askew)